Net zero: 5 fundamentals to make it happen
Net zero, or setting a goal of carbon neutrality, is becoming the new norm. But the transition will be difficult, as the demand for systems and solutions to meet COP26 commitments far outstrips available supply.
To create an effective net-zero program, leaders should focus on five essential points.
- Net zero is now a general organizing principle
If systemic problems are to be solved, solutions must come from a coalition of stakeholders (the private sector, governments, financial institutions, etc.). Join an existing coalition or create one, if necessary.
2. Translate net-zero promises into net-zero plans
Clear, detailed plans must include: emission targets, the cost of necessary investments, a climate-related risk/opportunity assessment for each branch of activity, etc.
3. The capital to finance the transition exists
Though they exist, markets and institutions that can channel money into decarbonization need to scale up. In terms of your own company’s investments, look to divest from carbon-heavy holdings.
4. Secure your supply chain
Prepare for a higher risk of shortages and volatility by finalizing purchasing contracts for green(er) raw materials.
5. Transparency will be inevitable – and beneficial
Be transparent about your exposure to climate risks and about your action plans Make use of digital tools to reveal where in the supply chain carbon emissions are concentrated.
by Harry Bowcott, Daniel Pacthod, Dickon Pinner, (McKinsey Sustainable, 12 November 2021).
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